MANILA, Philippines – Megawide Construction Corporation on Monday, June 30, said it would spend $100 million to build a portfolio of 100 megawatts of renewable energy over the next two years.
In line with this, the company signed an agreement with PhilCarbon Inc. for the development of renewable energy projects, including biomass, wind, hydro, solar, and geothermal.
Megawide chief finance officer Oliver Tan said the company’s venture into power generation would help address the looming power shortage in the country.
Tan said the company would break ground by the end of the year a 3.5-megawatt (MW) biomass project in Northern Luzon.
Megawide is primarily engaged in general construction, which involves constructing, enlarging, repairing, or engaging in any work upon buildings, houses and condominium, roads, plants, bridges, piers, waterworks, railroads and other structures. Its projects include Citysquare Residences, Antel Spa Residences, SM Sea Residences, Belle Grande Casino, University Tower II and Berkeley.
PhilCarbon is a renewable energy company focused on the development of clean power sources.
PhilCarbon plans to construct a 33.4-MW wind power project in Oriental Mindoro worth P3.4 billion ($77.94 million). The said facility is estimated to generate 73.15 gigawatt-hour of power annually.
The company also plans to rehabilitate the 50-kilowatt Pasonanca hydro power plant in Zamboanga City under a memorandum of agreement it signed with the city’s water district.
Strong earnings projection
Meanwhile, Megawide expects its net income and revenues to double over the next 3 years to P2.8 billion and P22 billion, respectively, with the addition of airport and hospital projects into its portfolio.
In 2013, Megawide posted a net income of P1.4 billion and revenues of P10.88 billion.
Over the next 3 years, Tan said 50% of the company’s total revenues would come from stable recurring income from projects, including the Mactan-Cebu International Airport and the Orthopedic Hospital. The remaining 50% will come from traditional construction business, residential, office, hotel and commercial projects.
“We will still retain current market share in the construction business, because we all know the cyclical nature of industry we are operating in. So we are pursing assets that will provide us with stable recurring income,” Tan said.
Megawide, in partnership with GMR Infrastructure, is expected to take over the Mactan airport by the last quarter of 2014. – Rappler.com
Photo of solar panels and wind turbines from Shutterstock.